My understanding is that alt is strictly intended as alternate text. The spec does not provide for alternate text appearing in the tool tip, which IE seems to have wrong. While images are loading, or if images are turned off, alternate text should be visible. It is meant to describe the image, or to provide link text if the image is used as an anchor.

title on the other hand, is intended as annotation, and is the rightful owner of the tool tip. It makes good sense to provide some caption text for pictures that (a) lack caption, or (b) justify some annotation.

The cross browser support for the correct spec is varied. Firefox has it right. IE doesn't. If you have both a title and an alt on an img, IE will still display the alternate text in the tool tip. This is just plain wrong, and defeats the purpose of the title attribute but not using it in the tool tip.

For years I have grappled with this, and recently began a massive audit to seek out all duplicate text, in which case the title was removed. If an annotation is used, then the title remains, but the alternate text is reduced to bare minimum.

Long annotations are not a good thing, but the spec provides us with longdesc to provide a url to a long description. Unfortunately, there is not universal support for this attribute (very few user agents can 'see' the url) much as there is poor cross browser url support for <blockquote/>, <q/> and <cite>.

Something I did for years, though now have to rethink, for links on images, was to put alt in the <img/>, and title in the <a/>. The result was thousands of duplicate text phrases. Gradually, I have replaced title text with domain of external link, or additional information for local links, where the link phrase was perhaps not adequate enough to describe the target.

From the standpoint of SEO, I think that Tamecrow has a good point: avoid 'unnatural' use of keywords. As for real SE value, I have not the foggiest idea. Hopefully some of the replies will clear up this question.

From an accessibility point of view, one supposes we should be make an effort to provide annotations with every image that lacks information within the context of the page. We might expect that screen readers do properly interpret the spec, and perhaps depend upon title text. But this is a gray area, to be sure. Hopefully some of the replies will clear this up, also. (Webnauts, where are you?)

From now on, I will be giving very careful consideration to use of title. If it's mostly superfluous (IE doesn't see it) then what's the point in having it bulk up a page? So far, I've eliminated about 90% of all occurances, and rather like the lighter weight pages.